Overview

Italy, which has the 12th largest global construction market outside the United States, is of strong interest to U.S. exporters. U.S. building products enjoy a reputation for quality and reliability in Italy, although not always up to Italian standards for aesthetic design, which is considered important even for the materials and components that end-users do not usually see. The Italian design and construction industry considers itself to be a world leader, in the same league as the United States, and is therefore interested in looking at unique or cutting-edge products and solutions.

According to estimates from the National Association of Building Contractors (ANCE), investments in construction rose 17.6% in 2022 compared to the previous year, to €162.9 billion. The industry continues to build on 2022’s robust levels because the market is still being fueled by post-pandemic public works and continuing public incentives to make buildings more sustainable and more digital. In addition, demand remains for larger homes, fed by the perception that teleworking and virtual schooling – widely implemented during the pandemic – will continue as a fixture of life. ANCE’s outlook for 2023 is that overall construction investment will continue to rise but at a much slower rate. The lack of additional incentives and uncertainties about the long-term economy will prevent the construction market from growing faster. Redevelopment of existing stock for housing purposes will contract on the previous year’s record levels (down 3.5%), but this will be made up for by continued growth in new housing construction (up 3%), private investments for non-residential buildings (up 6.5%), and public works (up 25%). ANCE still expects that most new housing and non-residential investments will be concentrated in a few cities in the north of Italy (Milan, Turin, and Bologna).

In 2022, the growth in public works was due partially to an increase in public works spending by Italy’s local governments and partially to acceleration of already-planned infrastructure spending so public entities could shift attention to the EU-financed post-pandemic recovery spending program, the National Resilience and Recovery Plan (NRRP). The NRRP foresees €108 billion in construction and related spending by 2026, of which 45% will be managed by local governments. ANCE’s estimate of 25% growth in public-works investments is mostly due to NRRP-funded tenders issued in 2022 reaching the execution stage. The 2022 budget law foresaw €39.6 billion in additional overall public works spending in the next 15 years to reinforce NRRP projects in the long term and to respond to infrastructure needs not covered by the NRRP. Of this, €10.8 billion will be for rail infrastructure and €10 billion for roads. This does not include the largest of the new projects to be financed outside the NRRP: the reactivation of a tender canceled in 2012 to build a 3.4 km bridge to connect the island of Sicily to mainland Italy. The Government of Italy hopes to begin bridge construction, at a cost exceeding €10 billion, in 2024. In addition, the government has committed €6 billion to continue reconstruction of parts of central Italy hit by catastrophic earthquakes since 2009.

According to ISTAT, Italy’s statistics agency, Italy had 487,000 companies in construction and related industries in 2019, the last year for which data is available. Specialized construction services and products accounted for 75.8% of the total, followed by building construction (22.8%), and civil engineering construction (1.4%). According to Eurostat, the EU’s statistics agency, Italy also has one of Europe’s highest home-ownership rates, as nearly 75% of families owned their own homes in 2021, accounting for over 20 million units. 

Italy is home to manufacturers of high-quality products and has access to European and global suppliers of competitively priced building products. U.S. suppliers must overcome shipping and regulatory costs and deliver on product performance and post-sales service requirements to compete on quality, reliability, and innovation, or they must provide a unique selling proposition. Regular direct engagement with distributors and buyers is often necessary to create and maintain sales and to distinguish specific product performance in relation to competitors.

Leading Sub-Sector

HVAC 

Italy is one of Europe’s three largest heating, ventilation, and air conditioning (HVAC) markets. According to Assoclima, Italy’s HVAC industry association, in 2022 the HVAC market grew 35.5% over 2021, reaching a total value of €3.1 billion, over half of which represents imports. National production in Italy rose 11% from €712 million in 2020 to €825 million in 2022. Increased interest in air quality during the pandemic and government subsidies for more energy-efficient systems stimulated a sturdy 17% increase in the number of air cooling and treatment systems sold in 2022. In particular, sales of air conditioning units grew from 865,000 a year in 2012 to 1.92 million in 2022, mostly for commercial use. Most are split heat air pump systems, which can heat space in the winter, which Assoclima says are attractive because customers can use them to reduce domestic gas consumption when prices spike and during shorter winters in Italy’s warmer southern regions.

The end of tax breaks and other government incentives targeting increased energy efficiency may reduce sales of new systems, but the higher end of market demand is shifting to more energy-efficient systems as well as IoT-enabled heating and cooling systems to offer real-time monitoring of system functionality and conditions.

Opportunities 

Intelligent and Sustainable Buildings  

Italian companies, the public sector, and end-users are increasingly interested in sustainability. Opportunities exist for products with strong “green” performance attributes, in areas such as energy and water savings and indoor air quality improvement. The Green Building Council’s LEED protocols, which originated in the United States, are growing in acceptance in Italy and many building professionals take them into account for new energy-efficient structures. The European Green Deal’s objective of increasing the energy efficiency of public and private buildings and the growing number of companies operating in Italy that apply ESG (Environmental, Social, and Governance) criteria are also market drivers for more energy-efficient buildings.

Smart and Sustainable Transportation Infrastructure

Italy’s NRRP sets aside €32.1 billion for sustainable mobility, including investments to integrate more regions into the high-speed rail network and complete the rail freight corridors. The plan should boost sustainable local transport through the extension of cycle lanes, metros, tramways, and zero-emission buses. This includes the construction of electric charging stations across the country and hydrogen refueling points for road and rail transport. It also sets aside money to “green” Italy’s ports. Opportunities may exist for U.S. companies with products, services, and know-how to make transportation and logistics smarter and more sustainable.

Port Infrastructure Modernization and Expansions:  

Italy will invest €9.2 billion to modernize and increase capacity at its ports between now and 2026. Much of this spending is earmarked to increase the size of the ships that Italy’s main container ports can handle through dredging, new breakwaters, and improved connections to road and rail links. Other funds will be spent on measures to make ports more ecologically sustainable or more efficient and secure through digitalization. U.S. companies with innovative solutions in these sectors may benefit from this increased public spending. 

These funds come on top of the projects already planned by the Ports of Genoa, Italy’s busiest container ports, which through 2024 plan to award €2.6 billion in tenders for a new breakwater, dredging, and an expansion of its shipyards. 

Resources

MCE Expocomfort.(March 12-15, 2024, Milan) - leading trade show dedicated to residential and industrial HVAC-R solutions.

CERSAIE (September 27-October 1, 2024, Bologna) - International Exhibition of Ceramic Tile and Bathroom Furnishings (CERSAIE) important ceramic tile industry trade show; main and historical focus is ceramics, but also covers sectors of surfaces and wall coverings, bathroom furnishings, and architectural finishes.

SAIE (October 9-12, 2024, Bologna) - one of Italy’s two main construction industry trade shows; held in the autumn in even numbered years.

ME (November 19-22, 2025, Milan; formerly MADE Expo) – one of Italy’s two main construction industry trade shows that attracts international exhibitors; biannual show, usually held in odd-numbered years.

U.S. Commercial Service Italy: 

Joshua Lawrence, Commercial Specialist 

U.S. Commercial Service, U.S. Consulate Milan 

Tel: +39 02 6268 8539 

E-mail: joshua.lawrence@trade.gov